Graham Corporation Reports Record Fiscal 2026 Revenue as Backlog Hits $532.6 Million
Graham Corporation Reports Record Fiscal 2026 Revenue as Backlog Hits $532.6 Million
Graham Corporation reported a strong finish to fiscal 2026, with record fourth-quarter and full-year revenue, supported by demand across its Defense, Space, and Energy & Process markets.
The company said fourth-quarter revenue rose 13% year over year to $67.1 million, while full-year fiscal 2026 revenue increased 17% to a record $245.3 million. Graham also reported a record year-end backlog of $532.6 million, up 29% from the prior year.
Defense and Space Demand Drive Growth
Management said the Defense market remained a major growth engine, helped by strong execution on key naval programs, expanded production capacity, and steady demand for mission-critical systems. The Space market also gained momentum, with fourth-quarter revenue increasing 14% from the prior-year period.
For the full year, Space revenue was roughly flat, but orders rose sharply, suggesting stronger revenue conversion in fiscal 2027. Graham said Space orders increased 76% year over year, reflecting growing long-term demand and program expansion.
Profit Margins Face Pressure Despite Higher Sales
Although sales reached new records, margins came under pressure. Fourth-quarter gross margin fell to 22.7% from 27.0% a year earlier. Full-year gross margin declined to 23.5% from 25.2%.
The company pointed to a less favorable sales mix, including a higher level of lower-margin Defense revenue, purchase-accounting effects from the FlackTek acquisition, tariff impacts, and lower aftermarket sales compared with the prior year.
Adjusted Earnings Beat Expectations
Graham posted fourth-quarter adjusted earnings per diluted share of $0.33, compared with $0.43 in the prior-year quarter. For the full year, adjusted EPS increased 13% to $1.40. Adjusted EBITDA for fiscal 2026 rose 16% to $26.0 million.
According to Investing.com, Graham’s Q4 adjusted EPS of $0.33 beat the analyst forecast of $0.27, while revenue of $67.1 million also topped expectations of $60.44 million. However, the stock declined after the report as investors focused on margin pressure and future cost concerns.
FlackTek Acquisition Expands Technology Platform
During fiscal 2026, Graham completed the acquisition of FlackTek, adding advanced mixing and materials-processing capabilities. The company said FlackTek contributed $2.8 million in fourth-quarter sales and gives Graham a third core technology platform alongside its existing fluid, heat transfer, vacuum, and power systems.
Backlog Provides Visibility for Fiscal 2027
Orders reached a record $359.4 million for fiscal 2026, giving Graham a book-to-bill ratio of 1.5x. Fourth-quarter orders were $78.7 million, with a book-to-bill ratio of 1.2x.
Management said about 35% to 40% of backlog is expected to convert into revenue over the next 12 months, while the rest will extend over multiple years, mainly in Defense programs.
Fiscal 2027 Outlook Signals Continued Expansion
For fiscal 2027, Graham expects revenue of $285 million to $295 million, gross margin of 24.5% to 25.5%, and adjusted EBITDA of $35 million to $40 million. Capital spending is projected at $18 million to $22 million, as the company continues investing in automation, advanced manufacturing, capacity expansion, and technology.
CEO Matthew J. Malone said fiscal 2026 showed strong execution and continued momentum, while CFO Christopher J. Thome said the company remains focused on integrating FlackTek and investing in people, processes, and technology to support long-term growth.
Overall Business Outlook
Graham’s latest results show a company with strong demand, record backlog, and clear growth opportunities across Defense, Space, and New Energy. Still, investors are watching margins closely, especially as Defense revenue mix, acquisition costs, tariffs, and capital spending affect profitability.
If Graham can convert backlog efficiently, improve production margins, and integrate FlackTek successfully, fiscal 2027 could mark another growth year for the company. However, execution will be important, as higher sales alone may not satisfy investors unless margin improvement follows.
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